Bill Jamieson: Life still sweet at luxury end of market

WHEN I succumbed to the great "shop hysteria" last week to buy a dinky PC electronic notebook for £279.99, I justified my surrender by reference to the huge VAT saving I would make. But the "saving" - less than £10 - was soon utterly lost amid all the peripherals: the operating system and anti-virus software, in-store installation fee, repair and theft insurance, mousemat, mouse and padded bag for safe mobility. "Buyers remorADVERTISEMENTse" kicked in like a mule long before I made a traffic-snarled exit from the congested hell-hole that is Edinburgh's Fort Kinnaird retail centre. What started out as a bargain hunt ended up feeling like a high-end luxury product purchase. Had I not just bought the male equivalent of the Gucci or Hermès handbag? Barely will I have got used to all its little ways than a new improved model will come along. Might not the 100,000-plus "slightly used" designer handbags now on sale on eBay be a clue as to the transience of so much modern consumer purchase? At the very least the experience rudely exposed the brouhaha and air of panic that has surrounded retail and consumer reaction to the raising of VAT. It has worked, not to crush essential household spending, but to spark a stampede for non-essential purchases. And, convenient though I'm sure it will prove to be, a PC notebook cannot, in all honesty, be counted as one of life's essentials, any more than a Gucci handbag. The "saving" is an illusion. In any event I suspect that, before long, the luring lingua franca of retailer bargain-promotion, discount incentives, two-for-one offers and special deals will erode our memory of life before 20 per cent VAT and bring us back into the shops. Yet hands are now being earnestly wrung over the prospects for consumer spending and the outlook for retailers in the course of 2011. I do not doubt that this will be a tough year for consumers, for reasons other than the VAT increase. But I am not convinced that this will be Year Zero for the big ticket, "high end" and luxury retailer. Indeed, one of the intriguing paradoxes of the past year has been the evident strength of the luxury goods sector in the face of this macro apprehension. Watchmaker Swatch Group got last year off to a flying start with "phenomenal" sales over a Christmas period overhung with worries over rising unemployment and approaching austerity.